State and Local Air Directors’ Meeting May 23, 2019 VW Settlement Update State and Local Air Directors’ Meeting May 23, 2019

VW Environmental Mitigation Trust As part of the settlement, VW will provide ~$2.9 billion for 2.0 and 3.0 liter violating vehicles to an Environmental Mitigation Trust. Funds from the trust will be used to remediate the excess NOx emissions.  Beneficiaries must fund projects from a list of Eligible Mitigation Activities. These projects include funding for the replacement and/or upgrade of: Heavy and medium-duty trucks and buses Freight switcher locomotives Ferries and tugs Ocean going vessel shorepower Airport ground support equipment Cargo handling equipment Light duty charging infrastructure DERA Option $2.7 billion for the 2.0 liter violating vehicles and $225 million for the 3.0 violating vehicles  All 50 states, DC, Puerto Rico, and federally recognized Indian tribes are eligible beneficiaries to the trust.  Each state, DC, and PR receive their own allocation (ranging from $8.125M to $422M) and tribes share a $54M allocation.

VW Environmental Mitigation Trust  Trust Effective Date -- October 2, 2017 All states, the District of Columbia, and Puerto Rico certified as beneficiaries.    State beneficiaries must submit beneficiary mitigation plans before accessing trust funds. There is no specific due date for state beneficiary mitigation plans. However, beneficiary mitigation plans must be submitted at least 30 days before the state can send its first funding request.

The DERA Option State and tribal beneficiaries may use trust funds as voluntary matching funds on DERA State and Tribal grants (the "DERA Option"). DERA Option allows the use of trust funds for actions not specifically listed in the trust but otherwise eligible under DERA such as: Generators Agriculture, construction, and mining equipment Line haul locomotives Marine engines Retrofit and idle reduction technology DERA Option is for DERA State and Tribal grants only. In FY 2018, 33 states expressed interest in using the DERA Option.

Remember: EPA is not making eligibility determinations on projects or providing guidance on how to fill out trust paperwork. EPA will only provide guidance on the DERA Option.  Eligibility determinations for the other eligible mitigation actions is the responsibility of the beneficiary.

Region 4 State Plans: Alabama (percentages are of total VW funds) Class 8 Local Freight Trucks and Port Drayage Trucks : $2,165,882.27 10.0% Class 4-8, School Bus, Shuttle Bus, or Transit Buses: $5,414,705.67 25.0% Diesel Emission Reduction Act Option: $974,647.02 4.5% Freight Switchers: $2,599,058.72 12.0% Ferries and Tugs: $1,516,117.59 7.0% Ocean-Going Vessels Shore-power: $974,647.02 4.5% Class 4-7 Local Freight Trucks (Medium Trucks): $2,815,646.95 13.0% Airport Ground Support Equipment: $974,647.02 4.5% Forklifts and Port Cargo Handling Equipment: $974,647.02 4.5% Light Duty Zero Emission Vehicle Supply Equipment: $3,248,823.40 15.0%

Region 4 State Plans: Florida, Georgia, Kentucky Florida: Shortly publish a Draft Mitigation Plan to be available for public comment for a period of 30 days Also publish a suite of Requests for Information seeking all interested individuals from the public and private sectors to provide FDEP with information based on each of the Eligible Mitigation Actions selected in the Mitigation Plan. Will then finalize the Mitigation Plan and submit it to the Trustee Funding the first Volkswagen Settlement funded projects in the State Fiscal Year 2019-2020 which starts July 1, 2019, and ends June 30, 2020 Georgia: Eligible transit buses $63,624,725.56 100% of total Kentucky: Eligible transit buses $16,302,919 at least 80 of total% Zero Emission Vehicle Supply Equipment (gov and non-gov) $3,056,797 up to 15 of total%

Region 4 State Plans: Mississippi Large trucks: 10% School bus, shuttle bus, or transit bus: 10% Medium trucks 10% Freight switchers (locomotives): 8% Ferries/tugs: 8% Ocean going vessel shore power: 8% Airport ground support equipment: 8% Forklifts and port cargo handling equipment: 8% Light-duty zero-emission vehicle supply equipment: 10% Diesel Emission Reduction Act (DERA): 5% Allowable administrative costs: 15%

Region 4 State Plans: North Carolina

Region 4 State Plans: South Carolina Class 4-8 School, Shuttle and Transit Buses (Eligible Buses) (80-100%) Light Duty Zero Emission Vehicle (ZEV) Supply Equipment (0-10%)

Region 4 State Plans: Tennessee Class 8 Local Freight Trucks and Port Drayage Trucks: 10% Class 4-7 Local Freight Trucks: 15% Class 4-8 School Bus, Shuttle Bus, or Transit Bus: 60% Light Duty Zero Emission Vehicle Supply Equipment: 15%